Types of Economic Activities: Profession, Employment and Business

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Economic Activities may be classified as follows:

1. Profession:

A profession is an occupation which involves rendering of personal service of a specialised nature. The service is based on professional education, knowledge, training etc. This service is provided for a professional fees charged from the clients. The professionals are members of professional bodies and conduct their activities according to the standards set by those bodies. The professional bodies have their own code of conduct which members will have to obey.

Features of a Profession:

(i) A person entering a particular profession should have specialized knowledge and training prescribed for entering that profession. One must have a professional degree such as C.A., LL.B., and M.B.B.S. etc. for entering a particular profession.

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(ii) The membership of a particular professional body is compulsory before entering that profession. A Chartered Accountant must be a member of the Institute of Chartered Accountants of India and this is necessary for other professions also.

(iii) Every professional body has a code of conduct which every member must follow. It contains norms of behaviour for members.

(iv) Professionals charge fees from clients for providing their services.

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(v) A professional cannot advertise himself if it is banned by the professional body.

Some important professional bodies working in India are as follows:

(a) Medical Council of India: For medical profession.

(b) Bar Council of India: For practising lawyers or for legal profession.

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(c) Institute of Chartered Accountants of India: For accounting profession.

(d) Institute of Company Secretaries: For Company Secretary ship

(e) Institute of Cost and Works Accountants of India: For Cost accountants

2. Employment or service:

When a person undertakes to render personal service under an agreement of employment, he is said to be in service or employment. The service is rendered for a salary or wage and/or other benefits attached to that job. The service may be in a government or a private organisation.

Features of Employment:

(i) An employment commences when a person joins some organisation for providing personal services.

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(ii) There is a relationship of employer and employee. A person taking up a job is an employee and the person who provides the service is called an employer.

(iii) The employer assigns duties to the employee.

(iv) An employee is not required to make capital investment.

(v) The employees get salaries/wages for rendering their services to the organisation.

(vi) The employee will have to follow service rules and regulations prescribed by the employer.

(vii) There are no standard qualifications for getting employment. The qualifications are linked to the requirements of particular jobs.

3. Business:

Business may be defined as an activity concerned with the production and exchange of goods and services with the objective of earning profits. The word ‘Business’ literally means ‘a state of being busy’. Every person is engaged in some kind of occupation in order to earn one’s living.

An entrepreneur runs a factory, a trader sells goods, a banker lends money, a transporter carries goods etc., all these activities are related to business. These activities are undertaken to earn a profit or a living out of them. People remain busy with one thing or the other.